Greek police fired teargas to disperse protesters throwing rocks and firebombs outside parliament today as more than 20,000 people marched through Athens to protest against new austerity measures to tackle the country's debt.

A strike by public and private sector workers brought the country to halt, grounding all flights and stopping public transport. State hospitals were left with only emergency staff, and news broadcasts were suspended.

Strikers and protesters banged drums and chanted slogans such as "no sacrifice for plutocracy" and "real jobs, higher pay". People draped banners from apartment buildings reading: "No more sacrifices, war against war."

The demonstrators included a group of about 100 youths wearing black, faces hidden by crash helmets and ski masks, some of whom smashed windows of a department store and bank, and sprayed riot police with brown paint.

Minor clashes also broke out in Thessaloniki, where about 14,000 people marched through the centre.

The EU-backed cuts follow moves to lower spending by €11.2bn (£10.1bn) to reduce the country's budget deficit from 12.7% of annual output to 8.7% this year. The long-term target is to bring overspending below the EU ceiling of 3% of GDP by 2012.

The left-of-centre government says the cuts are the only way of escaping Greece's crushing debt. The debts have hit the euro and alarmed international markets, which has inflated Greece's borrowing costs.

Unions say ordinary Greeks are being called upon to pay a disproportionate price for past fiscal mismanagement.

"They are trying to make workers pay the price for this crisis," Yiannis Panagopoulos, leader of Greece's private sector union, the GSEE, told Associated Press.

Greece insists it does not need a bailout, and its European partners are reluctant to fund one. Athens has called for European and international support for its austerity programme, saying that unless it receives backing – and the cost for it to borrow on the market falls – it might appeal to the International Monetary Fund for help.